DNV: Methanol Emerging as Scalable Marine Fuel but Economics Still Limit Uptake

Methanol is emerging as a practical alternative fuel for deep-sea shipping as engines and technical systems reach high readiness levels, but high costs and limited supply continue to constrain wider adoption, classification society DNV said in a new report.

As the industry explores multiple decarbonization pathways, methanol is gaining attention as a practical and scalable alternative fuel for deep-sea shipping, supported by over 450 methanol-capable vessels in operation and on order and technical solutions now available for all major ship types.

DNV’s latest white paper, Methanol fuel in shipping, highlights that methanol-fueled engines and technical systems have reached high readiness levels, and that existing global production sites, storage facilities, and a growing bunker fleet are providing a strong platform for wider adoption.

In addition, industry stakeholders are already investing in the fuel, with China accounting for 43 percent of planned global low-GHG methanol production capacity. But, as with all alternative fuels, methanol’s future role will depend on a combination of regulatory, economic, and operational factors.

 “As the maritime industry explores pathways to a lower-carbon future, it is important to consider a range of practical and scalable solutions. There is no one-size-fits-all answer, and different shipping segments and geographies will require different approaches. Methanol is one option that draws on established technologies and infrastructure, and it is encouraging to see the industry’s growing interest in a variety of alternative fuels,” said Knut Ørbeck-Nilssen, CEO Maritime at DNV.

Methanol can offer environmental benefits. It is sulfur-free, produces negligible soot, and emits significantly less NOx than fuel oil. The report highlights that certain bio- and e-methanol pathways can deliver very low or even negative lifecycle emissions, and that methanol’s compatibility with existing port infrastructure and the availability of interim bunkering solutions may also reduce complexity and cost for shipowners.

However, the report notes that cost and availability remain significant barriers, as is the case for many alternative fuels. Bio-methanol prices in 2025 average around USD 2,500 per tonne MGOe, roughly three times the cost of marine gas oil, while global production stands at just 2.2 million tonnes, far below the potential demand of up to 60 million tonnes by 2040.

The report models four demand scenarios, showing that regulatory frameworks such as the IMO’s Net-Zero Framework and FuelEU Maritime could be decisive in scaling up adoption.

“From a technical perspective, methanol-fuelled engines have demonstrated high reliability, with industry data indicating that modern dual-fuel engine designs have accumulated more than 600,000 operating hours on methanol. Retrofit feasibility is well established, and the use of conventional bunkering systems, unlike cryogenic fuels, means ports can adapt quickly and cost-effectively,” added Marius Leisner, Senior Principal Consultant in DNV.